A “Grand Bargain” To Improve Quality and Decrease Medicare Costs

There are just a few key reasons why
Medicare has become inordinately expensive. There is no end in sight for cost
escalation. But there are some obvious solutions and they all begin with
chronic illnesses.

Chronic illness – diabetes, heart failure,
cancer, chronic lung disease, etc. – are increasing at exponential rates; are
caused largely by lifestyle behaviors; and consume 70-85% of all claims paid.
enrollees tend to have chronic illnesses; 85% have at least one and 50% have three
or more and many are taking 5-7 prescription medications. Any attempt to
control costs must begin with chronic illnesses.


there a good solution to the Medicare cost rise issue? Are there approaches
that could be instituted now that would have an immediate impact on improving
quality of care and thereby reduce costs? There are and could be the basis of a
“grand bargain.” Here are five workable suggestions.


The first recommendation is to recognize that one is never too old to benefit
from sound preventive measures. Most chronic illnesses are related to excess
calorie consumption, lack of exercise, chronic stress and tobacco. And aging
leads to impaired mobility, vision, hearing, dentition and cognition. So
Medicare should strengthen the wellness, health and preventive programs with
specific funding to PCPs to engage in detailed, in depth preventive care. The
new annual preventative care session built into the
Care Act (
ACA/Obamacare) is a good start in this direction
but it must be augmented since a single yearly session is not sufficient to
deal with the serious lifestyle issues leading to and exacerbating these
chronic illnesses. This will improve health now and substantially bring down
costs in the longer term.

The second recommendation is to recognize that older individuals with multiple
chronic illnesses on multiple prescription medications who may have visual,
hearing, mobility and cognitive impairments cannot be effectively diagnosed and
treated in short time periods. There must be time – to listen, think, prevent and treat. This means adequate
reimbursement per visit to spend the time required. And it means Medicare must
pay the PCP sufficiently and specifically to provide chronic illness care
coordination. This must be done in a way that is a quid pro quo – higher
reimbursements but only in return for the care the patient needs and deserves.
This will markedly improve quality, substantially reduce costs and do so
immediately. It means the PCP must substantially reduce his or her case load
from today’s 2000 plus to no more than 1000 (and preferably substantially less)
so as to have the time required for each patient. (Many believe that it best to
convert from a fee for service to a fixed reimbursement system, capitation system
or a salaried approach. That is probably a good idea but only if the system
grants the PCP the critical needed time per patient, i.e., assignment of a
limited number of patients or a large enough payment per year per patient so as
to keep the total number of patients under care low enough to give the time

The third recommendation is that Medicare should reconsider its approach to
hospital care alternatives. For example, today a patient becomes eligible for
nursing home care only if he has been hospitalized for three or more days.
Costs could be dramatically reduced if a patient could be sent directly to a
well-qualified nursing home by his PCP who certifies in writing as to appropriateness.
Similar consideration should be given to home antibiotic administration and
other home care alternatives which mean better quality and lesser costs.


The fourth recommendation, somewhat of an alternative of the second, begins
with the realization that primary care is generally not expensive. Indeed when
Medicare originated, it was the patient’s responsibility to pay for primary
care and should be again. Medicare should institute high deductibles with the
opportunity for a health savings account (HSA) to pay for primary care with tax
advantaged dollars. Patients begin to ask questions and challenge
recommendations when they are paying for primary care directly. They can
request more time per visit and pay for it through their HSA. Both have the
result that the care quality goes up and the overall cost to Medicare goes way
down because the patient gets the time needed by the PCP to give good care,
avoid excess testing and avoid the reflex to refer to the specialist unless
really appropriate. The patient-doctor relationship is corrected to being a
direct contractual relationship leading to better care at much lower cost. Most
studies suggest that the deductible needs to be high enough to be meaningful,
often about $1000 or more. This could be reduced for those of lesser means.
Given the importance of preventive care, that might be excluded and continued
to be paid for by Medicare. High deductibles will be politically difficult. But
high deductibles are available thought the private plans for Medigap and for
the Part D prescription drug policies so the precedent is there. This would
lead to a much more responsible use of the entire system with better care and
much reduced costs. 


many PCPs are switching to a direct pay system where they no longer accept
Medicare and either expect to be paid per visit by the patient or be paid a
flat annual amount (retainer). Medicare is losing these physicians now who are
providing better care but at a cost to the patient. Better that Medicare
reexamines its policies and adapts now.


The fifth recommendation relates to end of life care. Americans believe in
individualism and the right to whatever care is available, damn the expenses. And
physicians are trained to treat death as an obstacle to be surmounted rather
than to be accepted as ultimately inevitable. This plays out eventually towards
the end of life where “one last” drug, procedure, etc. is proposed or requested
or both. Generally this occurs because the physician has not engaged in a
constructive, honest and empathetic conversation with the patient well ahead of
time and ongoing. This is fundamentally irresponsible use of the medical care
system by both patient and doctor. Much better is reasoned, empathetic
discussion between patient (and family) and the doctor followed by humane,
compassionate active support and emotional care – in other words, death with
dignity. End of life discussions are not only logical but humane. And it must
be stressed that this recommendation has nothing to do with so called “death
panels” or some nefarious means of rationing care.


of these recommendations incorporates a balancing
of rights and responsibilities
. The first offers the enrollee added
wellness and preventive services but it must come with the responsibility to
use them effectively. The second grants the PCP added revenue per patient but
only for the commitment to take the needed time with patients and of offering
extensive preventive services and chronic illness care coordination. This of
course means limiting the total number of patients under care per PCP. The
third grants a new approach to paying for alternative care but only provided
that it is certified as appropriate. The fourth places the responsibility for
first dollar coverage on the patient/enrollee but with it must come a right to
a better doctor-patient contractual relationship – one that the patient can
void if the response is not adequate for the dollars expended. And the fifth
recommendation places a responsibility on patient and doctor alike to have in
depth and rational discussions regarding end of life options and needs while
expecting Medicare to pay not only for the discussion time but also for the
option selected.


five recommendations could have a major impact on Medicare expenditures,
beginning immediately. The real benefit of course is that these recommendations
will improve health care quality while leading to more satisfaction by patient
and doctor alike. It would be a valuable “Grand Bargain.”